Closing Japanese Candidates

According to Manpower’s 2015 Talent Shortage Survey, Japan continues to lead the world with a whopping 83 percent of employers reporting difficulty filling jobs. This figure underscores the importance of ensuring acceptance at the most critical step in the recruitment process – the offer stage.

While much has been written about the difficulties foreign firms face in hiring Japanese talent, relatively little has been written about how to close candidates once they are in your recruitment pipeline in Japan. A transparent closing process to be shared by the employer, recruiter and potential employee is critical in ensuring success for your firm in Japan.

Even before recruitment begins, the employer needs to decide if the position to be filled is a ‘value’ hire or a ‘strategic’ hire:

A transparent offer process by the employer, recruiter and potential employee (candidate) in Japan is important for a few key reasons. Firstly, while changing companies is becoming more prevalent in Japan, many candidates have few experiences changing jobs, and need clear guidelines on how to approach the offer process, so as to remove the potential panic and subsequent withdrawal from an unfamiliar situation. Secondly, the common recruiter salary negotiation tactic of finding the lowest package that a candidate will accept while finding out the highest package that a company will offer misses the mark in terms of what recruitment should be about. The ultimate goal for any recruitment process is to make the best deal on behalf of both the employer and the candidate, from which a healthy, long-term employment relationship that is wholly agreeable to all sides can embark. Thirdly, and somewhat unique to Japan, non-Japanese employers often think that the key to a successful hire is simply to offer a higher salary to prospective employees, which is often not the case. A proper closing process can prevent an employer from overpaying as well. The interests of all parties can only be aligned if there is complete transparency from everyone involved in the offering process.

The following steps are suggested to ensure a fair and swift closing during the offer process:

1. Be sure that all sides involved in the negotiation are clear about what process the negotiation and closing will follow.
2. The recruiter confirms if the employer would like to present an offer to the candidate, and likewise, if the candidate would like to join the company. It is important to separate this point from salary for two reasons. Firstly, if a candidate’s desire to join a company is based primarily on money rather than career growth or a sincere interest in the employer, at least in Japan, these hires do not tend to be successful, often leaving for the next employer with a higher salary. Secondly, if there is no mutual desire to engage in an employment agreement, there is simply nothing to negotiate!
3. After clearly confirming with the candidate all details of the candidate’s current compensation package, the recruiter asks and confirms with the candidate what level and format a new compensation package should take, such that the candidate will accept the offer and be motivated to join and perform in the new role. During this process, naturally, the recruiter must also caution the candidate against asking for too much salary, as high salaries can create unachievable performance expectations on behalf of the employer. Furthermore, unrealistic expectations for money can cause an employer not to move forward with an offer to the prospective employee. Additionally, the recruiter must confirm with the candidate if the candidate will reject the offer if this compensation is not met. As a side note, it is rare that Japanese candidates ask for an exorbitant salary increase to change jobs, albeit some form of risk premium is desired by prospective Japanese job changers. This level of risk premium tends to be higher for Japanese candidates joining a foreign firm from a Japanese company, rather than when joining from another foreign firm.
4. The employer must then determine how strategic this specific hire is, and make their best offer, with the understanding that offering lower than the requested amount will potentially end the recruitment process there.
5. The candidate will ‘clarify’ the offer with the recruiter. If accepted, great. If not, simple requests for more offer money on behalf of most strategic Japanese hires are rare, as the main motivation to change jobs in Japan is typically not just money. Given Japan’s aging society, it is important to consider that Japanese candidates are also quite motivated by position/title and career path. Furthermore, a candidate will often consider their salary/offer request reasonable, so an offer lower than what they consider reasonable will not likely be considered a negotiation tactic on behalf of the employer; rather, given the time taken in the interview process and the mental commitment the candidate will have made to the company, candidates in Japan receiving lower than expected offers are likely to feel insulted, and may furthermore consider that the employer is not being realistic about hiring in the Japanese market – and such rumors spread. It is also not unusual for the Japanese to review the fine print and local HR policies with the employer, rather than going through the recruiter. This is not a red flag, but rather a sincere sign of interest which more often than not leads to a successful hire. Employers should welcome the chance to interact with the potential employee, allowing for an extra opportunity to establish a more personal bond that is so important to candidates here.
6. In the case that the company cannot match a candidates’ salary request, an apology for not being able to meet that request is the best course of action. Remember – candidates feel that their requests are reasonable, so an apology from the employer, combined with a sincere desire to work with the candidate, is the best approach. After said apology, rather than ask the candidate if he/she will accept less money, ask if he/she would like to ‘see’ what package the company can provide, and let the candidate judge for him/herself. Pushing candidates to accept an offer lower than the candidates’ desired offer amount can be seen as a pressure tactic and lead to resentment. On the other hand, by simply ‘presenting’ the offer that the employer can provide, this generates an atmosphere of good faith negotiation and sincere desire to hire the candidate, thereby creating a positive environment for the new employee should he/she join.
7. If the candidate tries to negotiate a higher offer, provided that the employer has indeed provided the best possible offer, the company can effectively walk away.

Lastly, regarding deadlines for prospective employees to accept an offer, one week to accept a verbal offer is a reasonable amount of time for all sides in Japan, though this one week should be to accept a verbal offer rather than a written offer. Written offers matching a candidate’s desired compensation package should not be provided without verbal acceptance first, as it runs the risk of a candidate using a written offer to renegotiate with their current firm or other potential employers. While this is uncommon in Japan, it is not completely unheard of either.

Of course, exceptions exist in many recruitment processes, and for the most difficult to find strategic hires, some additional concessions may need to be made on behalf of the employer. For example, it is important to keep in mind that many candidates forgo sizable one-off retirement payments when leaving their current employer, which can often be remedied by providing signing bonuses to prospective employees. As well, non-Japanese employers commonly need to accommodate for socially acceptable long notice periods, which can be as long as 2-3 months, though typically just one. We also cannot forget that after acceptance of an offer, proper attention should be paid to assisting the candidates during the resignation process, where the majority of late-stage falloffs occur. That said, by following the above steps, your company can simplify the offering process, leading to increased numbers of motivated hires, resulting in greater success for your business in Japan.